Civil Service Salaries Have Not Risen in Real Terms since 1970
I recently contributed to a fun blog, mainly written by economist Tom Weiss, which noted that modern day James Bonds, on Grade 7 salaries, could no longer entertain and dine in 007’s favourite restaurants. This made me wonder how Grade 7 salaries have compared with those in the wider economy, and with inflation.
I haven’t been able to get reliable Principal/G7 or wider economy earnings figures before 1970, but the later trends are startling. If I have got it right, the salaries of those in this key civil service grade have fallen well behind those in the wider economy, haven’t kept up with inflation as measured by the RPI, and have only just kept up with with CPIH. The figures are summarised in this chart.
Senior Civil Service salaries have generally increased even less, whilst the salaries of more junior staff have not been so badly affected. Further information about civil service pay is here.
A small part of the relative increase in private sector salaries, compared with civil servants, may be due to reductions in private sector contributions to pension schemes which will have necessitated increases in gross salaries so that retirement pension funds and other savings can be built up by employees. Civil service pension schemes, too, became less generous, but probably to a smaller extent.
The long term pressure on G7 salaries also led to a certain amount of ‘grade drift/inflation’:- a reduction in the difficulty of the work done by many G7s, so allowing the employment of less effective and/or less experienced staff than in previous generations.
I would be delighted if those more expert than me could improve or correct my analysis which is in a spreadsheet which can be downloaded here. (And thanks to David Higham for pointing me in the direction of much of the data.)